Ukraine aid bill moves ahead in U.S. Senate, still faces hurdles

Source: Reuters - Mon, 24 Mar 2014 23:59 GMT

Author: Reuters

(Adds quotes from Menendez, McCain, Hoyer.)

By Patricia Zengerle

WASHINGTON, March 24 (Reuters) - A bill providing economic assistance to Ukraine and imposing sanctions over Russia's seizure of Crimea cleared a procedural hurdle in the U.S. Senate on Monday, as backers attempted to win passage of the legislation later this week.

By a vote of 78-17, the Senate laid the groundwork for debating a bill that would back a $1 billion loan guarantee for the government in Kiev, provide $150 million in aid for Ukraine and neighboring countries and require sanctions on Russians and Ukrainians responsible for corruption, human rights abuses or undermining stability in Ukraine.

Supporters of the law said Congress should act quickly and forcefully to discourage Russian President Vladimir Putin from moving further into Ukraine or any neighboring countries.

The measure, however, also includes long-delayed reforms to the International Monetary Fund that are opposed by most Republicans in the Senate and House of Representatives, and this has complicated efforts to pass a Ukraine aid bill.

Lawmakers in the Republican-controlled House introduced a bill on Friday that does not include the IMF reforms requested by President Barack Obama's administration, which could set up a time-consuming partisan showdown.

The White House has been pushing Congress for a year to approve a shift of $63 billion from an IMF crisis fund to its general accounts. Administration officials have said Washington must make good on a commitment from 2010 and maintain U.S. influence at the international lender, while strengthening an institution that will play a key role in stabilizing Ukraine's economy.

QUESTION OF INFLUENCE

Some Republican lawmakers complain the IMF changes would cost too much at a time of deficits and budget cuts and lessen U.S. influence at the international lender. All of the "no" votes against proceeding with debate were Republicans.

New Jersey Democratic Senator Robert Menendez, chairman of the Senate Foreign Relations Committee, said failing to pass the reforms would lessen U.S. influence at the international lender at a crucial time.

"It's the IMF that is leading the effort to stabilize Ukraine's fragile economy, an essential task if there is to be any chance of reaching a peaceful political solution to the standoff with Russia," said Menendez, who co-authored the bill.

Leaders of the Group of Seven nations, meeting without Russia, voted on Monday on steps to punish Russia in The Hague. The vote came on the day Kiev ordered its remaining troops to withdraw from Crimea and Russian forces captured a Ukrainian base and a landing ship in the region.

It was not clear how Congress' political dispute would play out. Democrats in the House have said the aid package might need to go ahead without the IMF reforms.

Maryland Representative Steny Hoyer, the second-ranking House Democrat, said he backed the IMF part of the Ukraine bill. However, he said it was important to act quickly.

"If we can't get that passed, we ought to pass the $1 billion without the IMF because we need to move as quickly as we can to give confidence to the Ukrainian people and evidence to the Russians that we fully intend to make sure that Ukraine is a viable economic unit," Hoyer said at a forum in Washington sponsored by the centrist Democratic think tank Third Way.

The House Foreign Affairs Committee was due to vote on its version of the Ukraine aid bill, without the IMF reforms, on Tuesday. (Additional reporting by David Lawder, Anna Yukhananov and Jason Lange; Editing by Peter Cooney, Toni Reinhold)

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